Could Amazon become the first $1 trillion company?

Amazon has threatened to become the world’s first trillion dollar company when it launched Shipping With Amazon (SWA) in Los Angeles last month.

“Together with its fast-growing cloud network, huge warehouse expansion programme, and increase in services such as TV and even healthcare, Amazon is barrelling towards becoming the world’s first $1 trillion company – just as predicted in our 2016 report Amazon’s Prime Ambition,” said ParcelHero’s Head of Consumer Research, David Jinks MILT.

“Amazon’s multi-channel approach to retail and services means is able to rise above the challenges that saw its rivals Toys R’Us and Maplin’s falter last week, and New Look looking to shed around 60 stores. Amazon competes in all those sectors, and yet is even opening physical stores as rivals collapse around it. What sets it apart is that it has become an entirely new kind of business. It’s now an e-commerce store, a High Street retailer, a logistics provider, a cloud computing provider, a broadcaster and you can even use it to book a plumber,” he added.

Amazon Logistics now hold 7% of the UK delivery market. Yodel by comparison holds 8% and 11% of the market belongs to Hermes. When SWA was launched in the US, investors panicked and wiped 1% of the share value off Royal Mail in one day.

However, ParceHero doesn’t think that Amazon’s growth will stop here: “The real scope of Amazon’s ambitions is revealed in its China operations, where it has launched Amazon Logistics+. Any wholesaler can use Amazon to ship goods around the world by sea, land or air, not just Amazon sellers. Exactly as Shipping with Amazon will do for anyone wanting to send a parcel in the US and UK,” said David.

The race to become the first trillion dollar company currently is between Apple and Amazon. “Apple’s market cap was $887 billion on Friday, still outgunning Amazon’s $772 billion, but Apple can’t hope to match the breadth of Amazon’s products and services. It’s going to be a fascinating battle,” concluded David.